A limited company in Hong Kong with no doubt is a separate legal entity from the company's directors and shareholders. This article is providing you with essential things that you need to know before setting up a Hong Kong limited company.
Insights
Company name
must be ended with "Limited Company"
company name search must be conducted to make sure no existing company is using similar name
change of company name after incorporation should follow the procedure set out in the Companies Ordinance and the Articles of Association
Articles of Association
This is the by-law of the company that governing the board and shareholders decision making process. A tailor-made Articles of Association is allowed (and recommended for joint venture companies)
Director
minimum 1 director who is a natural person
there is no local director requirement
additional corporate director is allowed
Share Capital
minimum 1 share in any currency has to be issued
there is no par value for each share
share capital reduction is allowed
Trade mark
The laws governing the trade mark matters are separate from the Companies Ordinance in Hong Kong, this implies the company does not automictically own the trade make in its name.
Case sharing : Our team has seen and advised a worldwide famous comic book publisher who has omitted to do trade mark registration in while setting up a company in Hong Kong, as a result, the said company has to pay additional cost to rectify the omission.
Accounting and Tax
Accounting requirements
Every Hong Kong limited company must keep the accounting records that show and explain every transaction of the company
financial statements must be prepare for each financial year and auditor must be appointed for each financial year
We have shared more insights in relation to the accounting requirements in our article "Accounting requirements that every Director should know! "
Hong Kong Profit Tax
Hong Kong adopts a territorial basis of taxation, which means only the profits that is arising in or derived from Hong Kong is taxable
Two-tiered tax rates: 8.25% for the first HKD2 million profit and 16.5% for the remainder
More insights in Hong Kong profit tax can be obtained in our article "Hong Kong Profits Tax"
Cost and Time Frame
Government fee for setting up a Hong Kong limited company (year 2022) : Starting from HKD1,970
Company certificates can be obtained as fast as 2 hours (if submission is through our e-channel account linked with the government authority). For paper form submission, the longest time to obtain the certificates is 7 working day